Rocket Lab (NASDAQ:RKLB) Shares Gap Down on Disappointing Earnings

Rocket Lab Corporation (NASDAQ:RKLB)’s stock price gapped down prior to trading on Tuesday following a dissappointing earnings announcement. The stock had previously closed at $58.86, but opened at $54.99. Rocket Lab shares last traded at $59.0950, with a volume of 7,117,487 shares trading hands.

The rocket manufacturer reported ($0.12) earnings per share (EPS) for the quarter, missing the consensus estimate of ($0.07) by ($0.05). Rocket Lab had a negative return on equity of 6.48% and a negative net margin of 21.51%. The business had revenue of $267.83 million during the quarter, compared to analyst estimates of $257.21 million.

Key Stories Impacting Rocket Lab

Here are the key news stories impacting Rocket Lab this week:

• Positive Sentiment: Q3 revenue rose 73% year over year to $267.8 million, beating estimates, while backlog grew 52% sequentially to a record $3.57 billion. Rocket Lab forecast Q4 revenue of $270 million to $290 million, above consensus. Company Q3 results and outlook
• Positive Sentiment: Rocket Lab secured more than $515 million in Neutron launch deals during Q3, bringing the rocket’s backlog to 16 missions and lifting the listed base price to $70 million. Neutron launch contracts
• Neutral Sentiment: Analyst views were mixed: KeyCorp reaffirmed its Overweight rating and $100 target, while Piper Sandler cut its target to $58 and Cantor Fitzgerald lowered its target to $111 but kept an Overweight rating. Analyst forecast changes
• Negative Sentiment: Q3 EPS of -$0.12 missed the roughly -$0.07 consensus, and the net loss widened to $80 million. Reports also cited a wider-than-expected Q4 adjusted EBITDA loss outlook, raising concerns about costs and margins despite the revenue growth. Q3 earnings reaction
• Negative Sentiment: Investors also weighed Neutron’s first launch remaining scheduled for 2027, extending execution risk for a key growth program. Neutron timeline analysis

Wall Street Analysts Forecast Growth

Several research firms have recently weighed in on RKLB. TD Cowen reissued a “buy” rating and set a $90.00 price objective on shares of Rocket Lab in a research note on Thursday, October 15th. KGI Securities raised Rocket Lab from a “neutral” rating to an “outperform” rating and set a $107.00 target price on the stock in a research report on Monday, July 27th. Raymond James Financial started coverage on Rocket Lab in a report on Friday, September 11th. They set an “outperform” rating and a $80.00 target price for the company. Bank of America decreased their price target on Rocket Lab from $115.00 to $110.00 and set a “buy” rating for the company in a research report on Monday, August 31st. Finally, Citizens Jmp dropped their price target on Rocket Lab from $130.00 to $90.00 and set a “market outperform” rating on the stock in a research note on Friday, October 16th. Three equities research analysts have rated the stock with a Strong Buy rating, fifteen have given a Buy rating, five have given a Hold rating and one has given a Sell rating to the company. Based on data from MarketBeat.com, Rocket Lab has an average rating of “Moderate Buy” and a consensus price target of $100.10.

Insider Activity

In other Rocket Lab news, CFO Adam Spice sold 140,157 shares of Rocket Lab stock in a transaction dated Monday, November 2nd. The stock was sold at an average price of $52.79, for a total transaction of $7,398,888.03. Following the transaction, the chief financial officer owned 1,155,967 shares of the company’s stock, valued at $61,023,497.93. The trade was a 10.81% decrease in their position. The transaction was disclosed in a legal filing with the SEC, which is available through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, insider Marvin Clevenger sold 15,051 shares of the company’s stock in a transaction dated Monday, August 24th. The shares were sold at an average price of $69.63, for a total value of $1,048,001.13. Following the completion of the transaction, the insider owned 458,924 shares in the company, valued at $31,954,878.12. This represents a 3.18% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. The sale was made to cover tax withholding obligations related to the vesting of equity awards. In the last three months, insiders sold 551,832 shares of company stock worth $34,940,037. Corporate insiders own 8.40% of the company’s stock.

Institutional Investors Weigh In On Rocket Lab

Hedge funds and other institutional investors have recently added to or reduced their stakes in the stock. BlackRock Inc. purchased a new position in shares of Rocket Lab during the 2nd quarter valued at $4,124,970,000. Bank of New York Mellon Corp acquired a new position in Rocket Lab in the 2nd quarter worth about $245,764,000. Bank of America Corp DE purchased a new stake in shares of Rocket Lab during the 2nd quarter worth about $437,280,000. Mirae Asset Global Investments Co. Ltd. purchased a new stake in shares of Rocket Lab during the 3rd quarter worth about $120,856,000. Finally, Legal & General Group Plc purchased a new stake in shares of Rocket Lab during the 2nd quarter worth about $171,763,000. Hedge funds and other institutional investors own 71.78% of the company’s stock.

Rocket Lab Trading Up 1.1%

The firm has a market capitalization of $35.62 billion, a price-to-earnings ratio of -219.05 and a beta of 3.15. The company has a current ratio of 5.48, a quick ratio of 4.98 and a debt-to-equity ratio of 0.01. The company has a fifty day moving average price of $62.45 and a 200-day moving average price of $78.80.

About Rocket Lab

Rocket Lab is a space company that provides launch services and spacecraft and satellite systems for commercial, civil, and national security customers. Founded in 2006 by Peter Beck, the company operates internationally, with headquarters in Long Beach, California, and launch operations in New Zealand and the United States.

Its launch business centers on Electron, a small orbital rocket designed to carry satellites to space, and HASTE, a suborbital vehicle used for hypersonic test missions.